The Adjudicating Authority cannot directly ask the Central Government to refer the matter to SFIO as there is a procedure required to be followed under Section 213(b) of the Companies Act, 2013 – Ministry of Corporate Affairs Vs. Shri Amit Chandrakant Shah RP M/s. BCIL Red Earth Developers India Pvt. Ltd. – NCLAT New Delhi

In the matter, Adjudicating Authority directed to the Central Government to refer the matter to the SFIO for further investigation into the Affairs of the Corporate Debtor and other related Persons and Companies including Director of Companies of Corporate Debtor 85 related Companies, basing on the Review Report, as expeditiously as possible.  The Learned Counsel for the Appellant has relied on the Judgement in the matter of "Mr. Lagadapati Ramesh Vs. Mrs. Ramanathan Bhuvaneshwari [2019] ibclaw.in 212 NCLAT" and argued that the Adjudicating Authority could not have directly asked the Central Government to refer the matter to SFIO as there is a procedure required to be followed under Section 213(b) of the Companies Act, 2013 which requires that the Central Government on an Application made by any other person or otherwise "if it is satisfied that there are circumstances suggesting" requirements as mentioned in the Sub-Section exist after giving reasonable opportunity of being heard to the parties, may direct investigation by Inspector or Inspectors appointed by Central Government. It is argued that after following the necessary procedure which includes principles of natural justice, if the Central Government finds that the matter needs to go to SFIO, it would be at a subsequent stage. NCLAT considering the Section 213 of the Companies Act as well as the Judgement relied on by the Learned Counsel for the Appellant, held that an error has occurred when Adjudicating Authority gave directions to send matter to SFIO which needs to be corrected so that the proper procedure as required under Section 213 of the Companies Act, is followed.

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